When you’re running a small business, maintaining tight control of your finances is absolutely critical. You need a clear picture of your company’s financial health, and the ability to track every penny.

Finding the best small business accounting tool can be tough because there are so many options. In this article, we’ll review and compare four of the best accounting tools for online businesses.

Quickly decide which accounting tool is right for you with this handy comparison chart.

QuickBooks Online

Best small business accounting tools

QuickBooks has been one of the biggest names in accounting for 30+ years. It began as a desktop application, but now has a cloud-based online counterpart: QuickBooks Online.

QBO is a true double-entry accounting tool with plenty of reporting and a strong chart of accounts. It offers invoicing, payroll support, and inventory management, a project management tool, as well as an impression 200 integrations with other tools.

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The majority of bookkeepers and accountants will know their way around QuickBooks. This means when you give access to a new team member or outsourced partner, they’ll get up to speed quickly.

That said, QuickBooks is a generic product designed for everyone, which means it comes bloated with a lot of features you’ll probably never use. For instance, inventory management is a big part of the software, which is irrelevant to online businesses that don’t deal with physical inventory.

And since it has a lot of features in the way, it’s hard to navigate for inexperienced users. It doesn’t have a clean, easy-to-follow workflow like Xero (unless you have accounting experience).

QuickBooks Feature List

  • Connect multiple bank accounts
  • Track inventory and per item cost
  • Manage bills and vendors
  • Manage invoices and accounts receivable
  • Create custom invoices
  • “Pay now” buttons for instant payments
  • Dashboard overview
  • Simple reporting
  • Share access with accountant
  • Receipt tracking
  • Payroll for employees and taxes
  • Track sales, payments, and expenses
  • Mobile apps (use QuickBooks anywhere)
  • Lots of integrations
  • Profit and loss and balance sheets
  • Pay online and print checks
  • Mobile receipt capture
  • Create estimates
  • Banking data synchronization
  • Automatic tax calculations

The Bottom Line

QuickBooks is a great product, but it tries to be something for everyone, which means it’s a bigger tool than most people need. Finding the things you need within the app can be tough because there’s just so much.

Furthermore, Intuit’s support leaves a lot to be desired. Users complain of frequent technical glitches, problems updating, and unresponsive support.

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MYOB

Best small business accounting tools

MYOB – short for “Mind Your Own Business” is the Australian equivalent of QuickBooks. It comes with a range of features for both big and small businesses. It’s a Microsoft Gold Certified Partner, which means it works smoothly with most Microsoft products. They’re also a PayPal partner, which is helpful for ecommerce businesses.

MYOB is a Windows-based desktop application. It comes with all the typical accounting features, along with payroll, budgeting, and project management tools.

MYOB isn’t a cloud-based application out of the box, but you can purchase an add-on that lets you access some of the tool’s features from anywhere through your browser. However, the cloud app leaves a lot to be desired, so to get the most out of the tool you’ll need the desktop application on a particular device.

One cool feature about MYOB is the mobile dongle. Users can plug the device into their Apple or Android phone or tablet to swipe credit cards and EFTPOS payments in-person.

You can also get MYOB Kounta, a cloud-based point-of-sale add-on that’s great for brick-and-mortar stores, traveling sales people, or tradeshow/event booths. Unlike other accounting tools, there aren’t many integrations for MYOB’s cloud version.

At $100-$130/month, MYOB is one of the more expensive accounting tools. However, that’s a flat price. You don’t pay for additional users like the other tools on this list.

MYOB Features List

  • Works on and offline
  • Calculate and track taxes
  • Manage quotes, invoices, and statements
  • Accept payments
  • Track and pay expenses
  • Manage customers and vendors
  • Organize bank feeds
  • Manage purchase orders
  • Work with multiple bank accounts
  • Pay employees and track leave
  • Track employee time
  • Job and project costing
  • Create and track individual jobs
  • Manage physical inventory

The Bottom Line

MYOB is a capable product, but it comes with significant limitations. It doesn’t allow multiple users, which means you can’t restrict access based on your team or outsourcer’s role. If you give the login information to someone on your team, they’ll have complete access to everything, like your payroll information and employee bank account details.

While the payroll feature is handy, there’s no employee portal where they can view or print their payslips, request leave, or change their banking details.

That said, MYOB’s project management features are strong. The job costing and project costing features help you manage profitability of your work. It’s excellent for (as an example) construction companies that juggle a lot of labor and material costs for their projects.

Unfortunately, MYOB’s cloud platform is way behind the other solutions, so we don’t recommend it for online businesses that operate remotely.

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FreshBooks

While Freshbooks isn’t a full accounting platform like the other entries on this list, it’s a useful financial tool for freelancers and solopreneurs. Like other tools, it’s cloud-based so you can access your data and use the tool anywhere.

Users can create invoices, track their time and expenses, and organize their project data all in one place. Reviewers say FreshBooks is generally easy to use and intuitive, although there are some reports of struggles to import data. Pricing is reasonable at $15/month for 5 clients and $25/month for 50 clients.

Freshbooks calls itself an accounting tool, but it’s not (which is a bit misleading). It doesn’t come with a balance sheet and won’t let you rectify multiple accounts. If you require the services of an accountant once or twice a year, you’ll want to use a different tool so you can give them the information they need.

The biggest advantage to using FreshBooks is the flexibility you have to design and manage invoices. You have a lot of control over the look of the invoice templates to make them match your brand.

You can create pre-filled fields for different projects and billing amounts. For instance, if you charge $75/hour for designing and a flat $200 fee for consulting, you can set each job type as an option in a drop-down menu. Simply select the option to quickly create the field. You can even set up monthly recurring invoices and set conditions to charge late fees for overdue invoices.

FreshBooks Feature List

  • Customizable invoices (recurring, too)
  • Set due dates and reminders
  • Add discounts and request deposits
  • Automatic late fees
  • Multi-currency billing
  • Track and organize expenses
  • Send estimates and proposals
  • Have clients sign with e-signatures
  • Convert estimate to invoice
  • Track time for you and your team
  • Organize time by client and project
  • Collaborate with team on projects
  • Share files and conversations
  • Accept credit cards (multiple currencies)
  • Simple reporting on your dashboard
  • Add-ons and integrations
  • iPhone and Android apps

The Bottom Line

FreshBooks is a great tool for early businesses with minimal needs, but it’s not suitable if you intend to scale. If you plan to grow your business past 50 clients, hire employees, and expand your accounting needs, it’s smarter to start with an actual accounting tool. The cost of the more robust accounting tools are comparative, so start with the one that will meet next year’s needs too.

Besides, all financial management tools come with a learning curve. If you use a simple tool, you might become comfortable with it just in time to change to something else. It’s better to invest your time learning the one you’ll use for a long time.

That said, if you plan to be a freelancer forever and know your accounting needs won’t become more complex, Freshbooks might be right for you.

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Xero – Small Business Accounting Tools

Best small business accounting tools

Xero is the accounting tool made for non-accountants. It’s made with a single ledger. Multiple bank accounts feed into the software under different account codes, which makes the workflow quite different from other accounting tools. It’s user friendly and intuitive.

Xero is one of the few accounting tools that includes full cycle payroll processing for up to five employees at no additional cost. Unlike QuickBooks (its main competitor), it gives you the ability to process payroll checks, submit payroll tax payments, and file your payroll tax forms.

Xero comes with plenty of financial reporting features, which is extremely important for businesses of every size. You can customize, generate, and track basically any report you could ever want.

Furthermore, one of Xero’s best features is their open API. If Xero doesn’t provide an integration from a service you use, you can hire a developer to create it for you. Xero’s documentation is public and robust to help developers link other products.

Xero Features List

  • Bank reconciliation
  • Keep track of suppliers and customers
  • Simple dashboard
  • Track and organize expenses
  • Attach documents to your financial data
  • Financial reporting
  • Free, unlimited email support
  • Inventory management
  • Create and send invoices automatically
  • Mobile apps (Android, iPhone/iPad)
  • Multi-currency support
  • Payroll processing (free up to five employees)
  • Purchase orders
  • Quick and easy 1099s
  • Pay bills and invoices
  • Track and manage projects
  • Give out estimates and quotes
  • Create smart financial reports
  • Accept payments
  • Receive bills electronically
  • Segment contacts based on purchase history
  • Fixed assets
  • GST returns

The Bottom Line

We like to think of Xero like an iPhone and other accounting tools like basic Nokia phones. Technically they do the same things, but the iPhone is intuitive and easier to use. Plus, Xero comes with a lot of automated features built right in.

The only downside to Xero is that they don’t have a free tier. But they make up for this by offering free payroll tools for small companies and by letting you invite an unlimited number of users to access your data – all at no additional cost.

Free download: Comparison Chart: Xero, QuickBooks, FreshBooks, and MYOB

Our Final Recommendation

It’s no secret that we strongly recommend Xero. We set all of our clients up with Xero because we think it’s the perfect balance of features and benefits. We recognize, however, that it might not be the right option for you. Choose the tool that best fits your needs and workflow.

If you’re still not sure which accounting tool is right for you, read our full guide: How to Choose the Right Accounting Software for your Business.

Meryl Johnston

Meryl Johnston

Co-founder at Bean Ninjas
Meryl is a Chartered Accountant, entrepreneur and surfer!

Prior to Bean Ninjas she ran a cloud accounting consulting firm, worked in both commercial accounting roles, as an auditor (BDO), and as a lecturer in accounting and audit.
Meryl Johnston
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